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Debt deal passes in House

Gabrielle Giffords returns to the House floor to cast her vote on the debt bill. | AP Photo/House TV Screengrab
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Center stage will be a new select House-Senate committee charged with reporting back legislation to achieve $1.2 trillion to $1.5 trillion in deficit reduction over the next 10 years. Medicare, farm subsidies, education assistance and retirement benefits for federal workers are part of the mix. And the goal is for the 12-member bipartisan panel to write its bill by Nov. 23, in anticipation of Congress acting before Christmas.

If the panel were to fall short of $1.2 trillion, then across-the-board cuts will be ordered to make up the difference and ensure at least this minimum is met.

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The Congressional Budget Office estimates that if the full $1.2 trillion were to be implemented by sequester, that would require about $980 billion in real cuts spread over 10 years. Interest earned on the savings would account for the remainder, about $220 billion.

In crafting this backup trigger, Republicans refused to allow tax expenditures to be part of the mix. So defense spending, which is also a GOP priority, was chosen as a proxy of sorts with half of the cut — or almost $50 billion a year — coming at the Pentagon’s expense.

Medicare payments to providers, farm price supports, vocational rehabilitation basic state grants, mineral leasing payments to states, the Social Services block grant, and many smaller mandatory spending programs would be affected, but again, domestic appropriations would account for a significant part of the sequester.

To be sure, both parties have sworn that they will do everything possible to avoid such across-the-board cuts, but the formula is a reminder again of how much discretionary spending has borne the brunt of the deficit-reduction efforts so far this year, beginning with April’s showdown.

The bill now would add $917 billion more in savings, attributed to further reductions over the next 10 years, and the end result has been an almost 8 percent reduction — much of it borne by domestic programs — over the next 10 years.

To try to restore some balance, the administration won a major concession as part of the final bargaining that would set out targets for security and non-security in 2012 and 2013.

These will be crucial for both sides in trying to avoid another government shutdown scenario, but it will also require the House GOP to make major changes in the division of funds approved thus far by the House Appropriations Committee.

The new non-security or domestic total, for example, is $359 billion in 2012, down from 2011 but about $44 billion higher than what the House has been using for the same programs next year.

“We are still crunching the numbers,” House Appropriations Committee Chairman Hal Rogers (R-Ky.) told POLITICO, when asked if he would begin to put money back into some of the larger domestic bills that have yet to come out of his committee.

But at this stage, Rogers conceded that it is likely that there is little chance that he can complete all 12 of the annual bills before the new fiscal year begins Oct. 1. And certainly the Democratic Senate will want to use the new funding targets to its advantage then.

The $684 billion security total for 2012 reflects not just the annual Pentagon budget but appropriations for the Departments of Veterans Affairs, Homeland Security, and State, as well as nuclear weapons programs in the Energy Department and all foreign aid.

Measured against the same House Appropriations numbers, it appears to be a net reduction of about $20 billion from what Rogers has proposed. This sets up a competition between the different departments, and while the VA will be hard for the GOP to cut, the State Department and foreign aid will surely be targets.

“I’m not happy” said House Armed Services Committee Chairman Buck McKeon (R-Calif.), but his friend the speaker later told reporters: “This is the best defense number we are going to get.”

This was the first battle, nothing more. Working against those on the right is the simple fact that people who discover they can get other peoples money with their vote don't like to be told they can't. Working against those on the left is the reality that there isn't an infinite amount of money.

passing the debt ceiling increase isn't historic after some 90+ such increases... what's historic is that one party would bring this great nation to such a brink after having borrowed and spent so much of what is now accumulated national debt and pludged our country into the deepest recession since the great depression. historic is that they were willing to doubledown to get their way.

far left dems can now STFU since house democrats put this vote across the finish line- it was clear republicans didn't have the votes alone to pass it.

Every single American now has over $8,000 more in debt they will have to somehow pay in taxes to the federal government thanks to our federal politicians passing this debt ceiling limit. Up to this debt limit getting passed, every American already had to pay $46,000 to our federal government courtesy of our federal politicians, but with this $2.4 trillion getting added on, each of us owes and is going to have to pay the federal government a total of $54,000 to pay off our debt. I hope all of you who wanted this debt ceiling raised are going to enjoy pay an extra $8,000 in taxes to the federal government.

About 74 percent of the Tea Party Patriots in the US want Republican Speaker of the House John Boehner to go.

Mark Meckler, 49, the co-founder of the Tea Party Patriots in the United States, talks to SPIEGEL about the US debt ceiling, the radical right's uncompromising fight against the national debt and the "complete economic disaster" he claims President Barack Obama has created.

SPIEGEL: The world is looking at Washington and sees gridlock and chaos. How much have the negotiations over the United States' debt ceiling hurt America's standing in the world?

Meckler: Saying that these debates have hurt our image is absurd. What you currently see in Washington is one of the most responsible debates ever about the and scope of government. The world should look at what is going on in the United States as a model for what should happen in all countries.

SPIEGEL: We look at it and see a Congress held hostage by a small group of radical Tea Party members unwilling to agree to any budget compromise and risking a US default.

Meckler: What do you mean by "a small group?" Forty-one percent of voters in the last US election said they agreed with Tea Party values. And the primary values of the Tea Party are about fiscal responsibility.

SPIEGEL: But you are willing to accept a US default if your demands for massive budget cuts and no tax increases are not met. That seems rather irresponsible or even unpatriotic. Most leading economists forecast financial "Armageddon" in that case.

Meckler: Default is a false threat. We take in over $220 billion in revenues every month and our debt service is only roughly $20 billion. The only way we will default is if the President of the United States makes the irresponsible choice not to pay our debts. We Tea Party Patriots put principles first, and we have to understand what America is about. Our country was founded on an idea: liberty. But it requires fiscal responsibility for people to be free. We are becoming slaves to our own government. Every US family now owes $400,000 to $500,000 in national debt. We Tea Party Patriots fight for the future of the nation, and there can be nothing more patriotic than that.

SPIEGEL: Democracy is not just about winning fights. It can only function if all parties are open to compromise.

Meckler: The compromises that we have witnessed on debt have taken our country to the brink of financial collapse. Currently, the American government is spending 44 cents of each dollar on interest payments. We have compromised our way into disaster. None of the budget plans proposed have real cuts in them -- only promises to cut. The reality is that legally one Congress cannot bind the future Congress to cut, so these promises are actually a lie. We need real and immediate cuts.

SPIEGEL: The budget plan proposed by Republican speaker John Boehner contained massive spending cuts. Why were you so unwilling to embrace it?

Meckler: Look closely at the plan: It proposes $22 billion in cuts in the upcoming fiscal year. That is ridiculously little. It is the equivalent in the United States of shutting off the lights on Friday night and reopening at your normal rate of spending on Monday.

SPIEGEL: The plan also rules out any tax increases to close the deficit, though. Even the plan of the Democrats does not mention new taxes. So your movement already won the debate over taxes.

Meckler: This debate is not about taxes. This is a question of spending. There is no amount of taxes that we could raise that would stop our deficit spending caused by politicians who have lied so often.

SPIEGEL: Your movement often refers to Ronald Reagan, the Republican icon. But he raised taxes 11 times and the debt ceiling 18 times.

Meckler: At no time did he control both houses of Congress, so often he had no choice. But Reagan got attacked viciously by conservatives over this, just as we would attack any Republican president in the future if he did something similar.

SPIEGEL: The US economy is still growing very slowly. If you cut government spending drastically now, you will risk having a double-dip recession.

Meckler: That is simply wrong. Government spending is never efficient.

SPIEGEL: But in the short run, the cuts will lead to even higher US unemployment.

Meckler: Possibly on a minimal level. But we have worried about the short term for so long that we have damaged the long-term prospects of our nation. Look at what is going on in Europe: Spain is a complete disaster. It has more vacant homes than we have here, with only 40 million people. Italy is a complete disaster. Europe is going down the same path as the US, only many countries are far ahead and don't take corrective action.

SPIEGEL: Speaker Boehner failed several times to rally Republicans around his plans. Does he need to go?

Meckler: We have polled our membership and 74 percent of our members in our 3,500 chapters said it is time to look at new leadership.

SPIEGEL: And should he be replaced by a Tea Party representative?

Meckler: The ultimate goal is to have somebody in the House who is fiscally responsible. We have changed the debate in the United States, which is a pretty radical thing to do in such a short period of time. The question back then was: "How much more will we spend next year, not how much can we cut?" But you will see much more profound change in 2012.

SPIEGEL: Who could be the Tea Party candidate in the next presidential election?

Meckler: The movement has no clear preference. Our members are taking a cool and careful look at all the candidates on the Republican side. I am actually glad people are not more excited and blown away. The last time we saw that on the campaign trail, the country got Barack Obama in the White House -- and that led to complete economic disaster.

"""We are here to stay! We aren't going anywhere but down the throats of Leftists, Socialists, Progressives and Liberals! We will return "our" country to greatness once again. You can bank on that..."""

(Reuters) - Russian Prime Minister Vladimir Putin accused the United States Monday of living beyond its means "like a parasite" on the global economy and said dollar dominance was a threat to the financial markets.

"They are living beyond their means and shifting a part of the weight of their problems to the world economy," Putin told the pro-Kremlin youth group Nashi while touring its lakeside summer camp some five hours drive north of Moscow.

"They are living like parasites off the global economy and their monopoly of the dollar," Putin said at the open-air meeting with admiring young Russians in what looked like early campaigning before parliamentary and presidential polls.

US President Barack Obama earlier announced a last-ditch deal to cut about $2.4 trillion from the U.S. deficit over a decade, avoid a crushing debt default and stave off the risk that the nation's AAA credit rating would be downgraded.

The deal initially soothed anxieties and led Russian stocks to jump to three-month highs, but jitters remained over the possibility of a credit downgrade.

"Thank god," Putin said, "that they had enough common sense and responsibility to make a balanced decision."

But Putin, who has often criticized the United States' foreign exchange policy, noted that Russia holds a large amount of U.S. bonds and treasuries.

"If over there (in America) there is a systemic malfunction,

this will affect everyone," Putin told the young Russians.

"Countries like Russia and China hold a significant part of their reserves in American securities ... There should be other reserve currencies."

U.S.-Russian ties soured during Putin's 2000-2008 presidency but have warmed significantly since his protégé and successor President Dmitry Medvedev responded to Obama's stated desire for a "reset" in bilateral relations.

EARLY CAMPAIGNING?

Casually dressed in khaki trousers and a striped white shirt, Putin flew by helicopter to the tented camp as part of a string of appearances that are being closely watched in the run-up to the elections.

He did not say whether he plans a return to the Kremlin or will stand aside for Medvedev, his partner in Russia's leadership tandem, to run for a second term.

But young people crowding round Putin, caught up in the campaigning spirit created by huge portraits of Putin hung from trees, were not shy about saying who they wanted as president.

"Russia's next president will be small, bald and look like Putin," 17-year-old Ilya Mzokov joked with reporters. Asked why Medvedev was not paying a visit to the summer camp, he said: "Only serious people come here."

Youngsters chanted Putin's name and applauded his remarks as he strolled round the camp, where US-style business seminars, extreme sports and political mudslinging were among the topics on offer.

Putin, whose macho image appeals to many Russians, briefly swung himself up the first half of a climbing wall, filmed by a gaggle of state television cameras.

Nashi, which means "Our People," was created by the Kremlin to counter popular dissent after youth activism helped topple a pro-Moscow government in Ukraine's 2005 Orange revolution.

The group has worked to spread a personality cult around Putin and regularly campaigns against Kremlin critics.

See I told all you Liberals not worry. Boehner and McConnell had no backbone. Jellyfish is best to describe the Republican leadership.

See you WON. We now have left our children a $14,940,000,000,000 dollar debt. Wait it gets better. In 2013 you can add another $1,480,000,000,000 dollar more in debt. For a GRAND total of $16,420,000,000,000 dollar debt for the Obama Liberal administration. Congratulation. Victory for the Liberals.